King, the biggest social gaming company in the world, is looking to go public in America, just like its competitor Zynga did two years ago. Since going public, Zynga’s stock has gone from $11 to $3.74, and Zynga has fired hundreds of employees. Zynga is in trouble, and I believe King is going to follow suit. If you were to look at the revenue streams category on the business model canvas for King and Zynga, you would see the same model. Both develop addicting iPhone, Android and Facebook games, and release them for free. People then get addicted to their games and buy in app purchases. Candy Crush generates $850,000 a day for King from people who pay $.099 to beat level 50. While it appears successful, this model is not sustainable. King and Zynga think they can succeed in the mobile gaming industry by releasing new games because this model works on platforms like the Xbox and PlayStation. However, they fail to realize one key difference; on the Xbox and PlayStation, there are huge barriers to entry. Their only competitors are massive game developers. But in the mobile game industry, the barrier to entry is a computer. It’s King and Zynga versus anyone with a MacBook. King and Zynga are competing with thousands of developers, anyone of whom can create the next Candy Crush, and King all of a sudden loses a huge chunk of their revenue, and ends up just like Zynga.
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Gold, J. (2013, June 03). Zynga fires 18% of workforce, vows refocus on mobility. Retrieved from http://www.networkworld.com/news/2013/060313-zynga-layoffs-270414.html
Kovach, S. (Producer). (2013, July 18). Here’s Proof That Candy Crush Influences Everything — Including Religion Read more: http://www.businessinsider.com/candy-crush-igod-logo-2013-7